Obama Team Advised to Spend More Than $600 Billion on Economy

WASHINGTON (AP) - After consulting with economists from across
the political spectrum, President-elect Barack Obama's advisers are
contemplating an economic recovery plan that could cost as much as
$1 trillion over two years.
The figure is far bigger than the $600 billion that Obama's team
initially envisioned.
A number of economists, including former advisers to Republican
presidential candidate John McCain, have suggested to Obama's team
that the economy needs a much bigger cash infusion, possibly up to
a $1 trillion over two years.
Obama's top economic advisers solicited the opinions as they
worked to assemble a spending plan that would meet Obama's goal of
saving or creating 2.5 million jobs over two years.
Obama advisers say his team has not settled on a figure. But the
advice represents a far bigger sum than his advisers had
considered.
Under scenarios envisioned by his economic team, a $600 billion
package would satisfy Obama's jobs goal by the first quarter of
2011, but would leave an unemployment rate of 8 percent two years
from now.
Obama's economic team believes that to put unemployment on a
downward trajectory with a goal of 7.5 percent or less over two
years would require a stimulus package of about $850 billion. That
would generate about 3.2 million jobs by the first quarter of 2011.
Obama advisers say they agree with economic forecasts that
predict that without a government infusion, unemployment will rise
above 9 percent and not begin to come down until 2011.
Among those whose opinions Obama advisers sought were Lawrence
B. Lindsey, a top economic adviser to President George W. Bush
during his first term, and Harvard professor Martin Feldstein, an
informal McCain adviser and former chairman of the Council of
Economic Advisors under President Ronald Reagan.
Feldstein recommended a $400 billion investment in one year,
Obama aides said. Lindsey told Obama's team that a package should
be in the range of $800 billion to $1 trillion. The advisers
revealed the discussions on the condition of anonymity because no
decisions had been reached.
"I do recommend $400 billion in year one and expect a similar
amount in year two," Feldstein said in an e-mail message. "The
right amount depends on how it is used."
Obama's team has been spending the past several weeks reviewing
economic data and consulting with experts to arrive at a dollar
figure considered large enough to turn around the sinking economy.
Many economists agree that an infusion of government spending is
critical to get out of a recession.
A stimulus package that approaches $1 trillion, however, could
run into significant Republican opposition in Congress. It also
could cause heartburn for moderate and conservative Democratic
lawmakers, known as Blue Dogs, who are budget hawks and loathe
large budget deficits.
Obama has said he wants Congress to assemble a recovery package
that includes massive spending on highway and bridge repairs and
maintenance, new and upgraded schools, energy-efficient government
buildings and a host of new environmentally friendly technologies.
This week, House Speaker Nancy Pelosi said Democrats are
preparing a recovery bill in the range of $600 billion, blending
immediate steps to counter the slumping economy with longer term
federal spending that encompasses Obama's plan.

(Copyright 2008 by The Associated Press. All Rights Reserved.)


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Comments are posted from viewers like you and do not always reflect the views of this station.
  • by Richard Location: Lexington on Dec 18, 2008 at 04:22 AM
    You have to spend money to make moey guys, and NO we shouldn't have a committee made up of everyday citizens. Most of Americans are uneducated and have no idea what economics even means. This stimulus package actually makes sense, a whole lot more probable than Bush's idea to hand out $600 checks. Here, lets give drug addicts $600....that will solve our problems. Please, Obama actually has a plan to better our economy.
  • by Zatoichi Location: Richmond on Dec 18, 2008 at 03:32 AM
    I want my stimulus checks...monthly from now on. Can't wait to start my new job building windmills and running those long extension cords to everyones house. Then electricity will be free. My solar powered car is on order as well. Obama will fix this darned Global Warming that is going on too. Of course you realize Global warming can cause cooling as well...just makes sense,,,right?
  • by steve on Dec 17, 2008 at 06:33 PM
    They are all the same people they are all out of touch millionaire politicians they don't care about us they don't live like we do and could care less i wish people would really look at these people for who they are all of them not just one party government first people second that's the truth.
  • by Chris Location: Avon on Dec 17, 2008 at 12:17 PM
    If Obama and the congress fund this we may as well just give the government our whole paycheck every week and get in line for food, medicine etc. etc. Typical Democratic/Lefty Librel response is all I can say. We can save the world by giving money away, it has to come from somewhere people. Good grief, wake up America!
  • by Natasha Call Location: Saratoga Spring, Utah on Dec 17, 2008 at 11:38 AM
    Shouldn't there be a committee created by regular everyday citizens, from across the U.S., in various industries, to evaluate the spending of American taxpayers' money on these stimulus packages? This, instead of the same old Washington machine? I have posed and evalutated this question on my blog at http://issuesoncall.blogspot.com, if you would like to read more, since there is not enough room here. I appreciate your article! Thanks!
  • by Heather on Dec 17, 2008 at 10:56 AM
    great idea and Im sure he will se it through.

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